THE BLOG
09/03/2011 06:58 pm ET Updated Nov 03, 2011

Drawing the Wrong Lessons -- as Usual -- for Labor Day

Washington, D.C. -- So one of the Department of Energy's big clean-energy bets -- Solyndra -- didn't make it. But this city is wrangling over which wrong conclusion to draw. The Tea Party Republicans, of course, see this as proof that America can't expect to compete -- and that clean-tech advocates and environmentalists were silly for thinking we could. The Republican National Committee turned Solyndra's bankruptcy into an example of the one modern innovation for which America's preeminence is unchallenged -- the campaign attack ad.

Mainstream media, like the New York Times, pointed out that Solyndra failed not because it wasn't able to make electricity -- this was no "cold fusion" chimera -- but because cheap Chinese solar panels that use more conventional technologies beat its price point. How did the Chinese get so cheap? Not through innovation -- they lag behind the U.S. in solar tech. Not through labor costs, which are insignificant in making solar panels. No, the Chinese got cheaper loans, faster permits and more support from their government for their exports.

The Tea Party storyline ignores the fact that the global solar market is expanding fast -- and global solar costs are dropping equally fast. Solar really is the 21st-century equivalent of the previous century's automotive industry -- yet the Tea Party is willing to let America be left behind with coal and oil.

But the other D.C. solar storyline is equally lame. It's the "we tried to go too fast story," and the most spectacular example was Friday's Obama administration decision to postpone issuing new air-quality standards for ozone. But the ozone standard that is being "postponed" wouldn't have required a single factory to buy a single piece of new equipment for years. What it would have done is signal to markets that America is ready to move from being the global laggard to the middle of the pack in implementing innovation. But that was way too fast for today's Washington -- on either side of the aisle.

So what should our nation's leaders do? If China is gaining control of the solar panel space with cheap credit, why not set up a national clean-energy bank that can make loans cheaply? Not every 1930s rural electrification co-op made it, but rural America got electricity -- and America led the world. (Disclosure -- My father worked for the Rural Electrification Administration his whole life -- so I grew up hearing how FDR electrified rural America.) President Obama and the congressional Democrats have floated this idea -- but they've never gone to the mat for it. We'll probably hear about it again next week. But we won't make it happen until something changes.

And if it's outright subsidies that get Chinese solar panels into the U.S. (which evidence suggests is at least part of the story), then why not enforce our trade laws? (I know, law and order is so... Nineties.) But the reality is that solar power is not a failed or failing business -- it's the future. If the U.S. wants to be part of that future, then we need to make solar panels here in the USA, and we need to create the markets for panels with public policies like renewable-electricity standards and feed-in tariffs.

And if China is taking away market share, it is most definitely not evidence that we are doing too much or moving too fast. Nor does it mean that U.S. companies (as per the Tea Party) have no business innovating. It's simply proof that neither timid nor bought-and-sold politics will cut the mustard in the 21st century.

Don't weep for Solyndra. Weep for the American dream.